NHS trusts struggling with budgets

Wednesday, 27 July 2005 12:00 AM

NHS trusts in England are struggling to manage their budgets and last year overspent by almost £500 million, a new report from the Healthcare Commission says.

The publication of the latest annual star ratings of performance show that despite increased investment, almost a quarter of trusts failed to balance their books last year.

Commission chief executive Anna Walker warned that, despite an overall improvement in performance this year, these financial problems threatened to undermine patient care.

"Quality of care is inextricably linked to good financial management. Temporary instability must not lead to a permanent problem. If it does, patients will lose out because the standards of care will suffer," she said.

Shadow health secretary Andrew Lansley said the figures showed NHS finances were "close to meltdown" and would result in a reduction of services.

"The government have imposed costs on the NHS and wasted money on bureaucracy, rather than spending it on frontline care," he said.

"The result will be major reductions in services in many parts of the country. Until we have genuine reform of the NHS, services will not grow to meet the standards we all aspire to."

Liberal Democrat health spokesman Steve Webb said the commission's report indicated the flaws in the government's foundation hospital plans, which would put trusts in charge of their own budgets.

"The NHS is entering an unprecedented era of change. Although some trusts may be performing well, others are facing tough times ahead and it is unclear whether ministers are prepared to let them fail," he said.

"Trying to turn hospitals into fierce competitors is going to be divisive and will lead to an unstable NHS."

This is the last year the star ratings are being used to gauge performance of NHS trusts, and from now on the commission will rate how trusts perform in relation to its new annual health check, which aims to take in more than just government targets.

However, Ms Walker insisted that today's figures were of value and said the overall improvement in performance "should not be underestimated".

"Four years ago the target for patients waiting to have an operation was 18 months, but today it is nine months. There are more top performers and fewer trusts with no stars at all," she said.

According to this year's star ratings, the overall number of trusts obtaining the maximum three stars increased from 146 to 165 last year, while there was also a fall from 35 to 24 in the number of trusts with no stars.

Thirteen more primary care trusts (PCTs) achieved three stars than last year, but this still amounts to just 19 per cent overall, compared to 42 per cent for acute and ambulance trusts.

However, for the first time in three years there was a drop in the number of acute hospital trusts with three stars, a fact attributed to the difficulties in meeting financial performance targets and the tougher targets for A&E.

Among ambulance trusts, the number of organisations with three stars rose by 10 per cent, although 12 still have one star or none. And only a quarter of mental health trusts have three stars, although the number of two and three star trusts has increased.

The commission also looked at performance in relation to MRSA for the first time, finding 28 trusts with above average scores and 21 with below average scores.

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